In his 2024 Muskoka Market Report, President and CEO of Chestnut Park, Chris Kapches reports: Almost right across the Region, residential and waterfront, (with the sole exception of Lake of Bays), September proved to be the first robust month for property sales in 2024, helping to improve the negative year-to-date performance by the resale market.
MUSKOKA RESIDENTIAL MARKETPLACE
In the case of residential property sales, September’s 225 reported sales (all data is MLS numbers) were 18.1 percent higher than reported sales for September 2023. The average sale price for all properties sold came in at a robust $1,124,852, higher than the average sale price achieved for all properties sold in the greater Toronto area. On a year-to-date basis the residential market has produced sales that are 6.7 percent higher than 2023, but by historical comparisons 2024 was weaker than sales achieved in 2014, a decade ago.
September’s market improvement, for both residential and waterfront sales, can be directly linked to the reduction in the overnight lending rate by the Bank of Canada on September 4th by 0.25 percent. It was the third 0.25 percent reduction in four months, and almost overnight consumer confidence turned positive, and real estate markets came out of their year long slumber. All markets have been negatively impacted by a lack of affordability due to punishing financing costs. Notwithstanding the recent rate cuts by the Bank of Canada borrowing costs remain high by historical comparisons. In the decade before the beginning of the Covid 19 pandemic the benchmark rate never exceeded 1.75 percent, averaging about 1.00 percent. It is still a lofty 4.25 percent.
MUSKOKA WATERFRONT MARKETPLACE
The recreational waterfront market also had a strong showing in September. There were 121 reported sales, almost 25 percent higher than the reported sales for September of last year. The average sale price was also strong, coming in at $1,570,493, 18.5 percent higher than the reported average sale price for all waterfront properties sold in September 2023. The market’s strong performance in September boosted year-to-date results for waterfront sales into positive territory. Notwithstanding September’s robust performance, sales for September and sales on a year-to-date basis were substantially lower than historical norms.
WATERFRONT MARKETPLACE REGIONS
Bracebridge, Gravenhurst, Dysart et.al, Georgian Bay Township, Highlands East, Huntsville, and the Muskoka Lakes recreational waterfront marketplaces all produced very strong numbers, averaging results 20 percent higher than September 2023. Only the Lake of Bays’ market performance did not match or exceed last September’s results. Throughout 2023 the Lake of Bays waterfront recreational marketplace has lagged compared to other waterfront markets. This is due, no doubt, to the price point of available properties. Lake of Bays finds itself between the very desirable and pricey properties of the Muskoka Lakes and the more affordable properties in the other regions. As the Bank of Canada’s benchmark rate continues to decline – two remaining rate meetings are scheduled for 2024, one in October and the last in December – Lake of Bays waterfront property prices will become more accessible to middle buyers. In September the average price for all waterfront properties sold on Lake of Bays came in at $2,090,000, 42.5 percent higher than September 2023.
MUSKOKA LAKES REGION
Notwithstanding an average sale price of $3,108,095 achieved in September, Muskoka Lakes waterfront sales activity exceeded last years results by 5 percent. However, like all Muskoka Region waterfront marketplaces, September’s results were substantially lower than results achieved over the last decade. Clearly sales results are improving and will continue to do so as we move through the last quarter of 2024 and into 2025.
On Muskoka’s big lakes, Lake Muskoka, Lake Rosseau and Lake Joseph, the average sale price achieved, albeit on fewer reported sales than in the past 6 years, has remained exceeding strong, coming in at $4,102,500, almost unchanged from last year at this time.
CHESTNUT PARK’S PERFORMANCE
Unlike the overall market’s year-to-date negative variance, Chestnut Park’s Realtors actually exceeded last year’s performance, both in dollar volume of sales as well as a modest increase in properties sold. This is an exceptional accomplishment in the difficult market of 2024, when markets throughout the Region were in year-over-year negative territory. Chestnut Park’s Realtors were responsible for more than $446 million in dollar volume sales, more than 22 percent higher than recorded sales in 2023, with 39 ends recorded in September alone. Chestnut Park’s Realtors were responsible for 4 sales with sale prices at or more than $5 million in September, and one at $13.5 million.
There are 17 real estate offices that operate in the Muskoka Lakes Region. Chestnut Park’s Port Carling office exceeded the closest competitor brokerage office by 162 percent in dollar volume and the next closest competitor office by more than 300 percent in sales. An impressive accomplishment by Chestnut Park’s Realtors.
LOOKING AHEAD
All market indicators are positive. The Bank of Canda’s historically high benchmark rate has started its decent, a decent that is forecast (Bloomberg) to continue through the balance of 2024 and throughout 2025. A survey of major economists forecasts that the benchmark rate could be as low as 2.75 percent by year-end 2025. As a result of various other housing measures the Federal government has and will be implementing, there is no doubt that there will be further improvement to the southern Ontario housing market. This in turn will drive the waterfront recreational market to pre-pandemic sales levels. With increased sales and buyer demand, average sale prices will continue to rise in 2025. The Canadian Real Estate Association is forecasting an increase of 5 percent in average sale prices for 2025.
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